Regulators set January decision for Mississippi Power rates

JACKSON, Miss. (AP) — Mississippi's three public service commissioners said Tuesday that they would decide by January how much customers should pay for a disputed power plant.

The utility regulators ordered Mississippi Power Co., the Public Utilities Staff and others to explain their positions on rates for the Kemper County power plant after settlement talks broke down last week.

The three elected commissioners set a Dec. 4 hearing on the issue. Commissioners would then write an order deciding how much customers should pay for the part of the plant that generates power using natural gas, unless settlement talks revive.

"This just provides a method to move forward to provide a final resolution for Kemper," said Southern District Commissioner Sam Britton, a Republican. "Now the commission itself will step in."

Mississippi Power, a unit of Atlanta-based Southern Co., has already lost $6 billion on the $7.5 billion Kemper plant. The utility suspended efforts to complete a unit that would gasify soft lignite coal after the Public Service Commission said it didn't want customers to pay for that part of the plant. Commissioners said Kemper should run on natural gas instead and that rates should stay level or fall.

The commission allowed the company to raise rates by 15 percent in 2015 to recover $800-million-plus for part of the plant that has been burning natural gas since 2014. But that leaves hundreds of millions on the table to be resolved in a settlement. Commissioners had told the staff and Mississippi Power to try to make a deal. Many Public Service Commission proceedings are resolved by staff-utility agreements that commissioners ratify.

The company and the staff initially disagreed by $250 million or more on the amount of assets for which Mississippi Power should be allowed to charge its 189,000 customers. The staff said some of the costs the company wanted to charge weren't justified as costs of the natural gas turbines. Although the difference would initially have little impact on rates, staff Executive Director Virden Jones said customers would pay substantially more over time under Mississippi Power's plan.

The utility said its proposals wouldn't further raise rates and would help the company rebuild its financial stability. Even under Mississippi Power's plan, the company says it would lose another $100 million to $200 million. Staff members last week offered to split the difference and let the company to collect about $110 million more, but the company rejected the offer.

"We believe the facts contained in the company's filing demonstrate that Mississippi Power is operating in the best interest of customers and what is required to ensure the company's financial stability," Mississippi Power spokesman Jack Bonnikson wrote in an email.

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